Higher demand for smartphone chips boosts King Yuan

GOING MOBILE:：Growth was driven by demand for smartphone chips and 28-nanometer testing. The firm plans to spend NT$5bn on capital expenditure

Staff writer, with CNA

Mon, Apr 08, 2013 - Page 14

King Yuan Electronics Co (京元電), one of Taiwan’s leading IC testing service providers, said on Saturday that its sales for last month grew from a month earlier, with market analysts attributing the growth partly to rising demand from communications device clients.

In particular, solid global sales of smartphone chips spurred King Yuan’s sales growth for the month, while testing services for chips used in flat panel screens remained stable, analysts said.

They said demand for testing services for chips on the advanced 28-nanometer technology process was also on the rise, further boosting King Yuan’s sales.

Last month, King Yuan posted NT$1.19 billion (US$39.8 million) in consolidated sales, up 14.71 percent from February, and 8.7 percent from a year earlier.

In the first three months of this year, King Yuan’s consolidated sales totaled NT$3.38 billion, down 9.82 percent from the fourth quarter on the slow season effects seen during the January-March period.

However, the first quarter figure was up 6.04 percent from a year earlier. Analysts attributed the year-on-year growth to buyers from Europe and the US rebuilding their inventory.

Looking ahead, King Yuan said as global economy is expected to continue recovering in the second quarter, the global testing business would grow accordingly.

To meet a recovery in global demand for this year, the testing service provider plans to spend about NT$5 billion on capital expenditure this year to expand its business.

Meanwhile, King Yuan has proposed paying a cash dividend of NT$1.1, a payout ratio of 84 percent based on the company’s earnings per share of NT$1.3 last year.